Sunday, November 29, 2009


English has tenses for a reason. The subjunctive is used when something is not real or actual. We were in Starbucks this morning and they have wishes up including this one " I wish every day was a holiday"

Obviously every day is not a holiday, even in the past. The wish should be " I wish every day were a holiday." Small point but if there were not a good reason for expressing the difference our language would be the poorer.

Saturday, November 28, 2009

Doing the Right Thing

Tonight Rick Neuheisel the UCLA coach took a time out when his team was down by two touchdowns and there 54 seconds left to play. Had he not done that he could have, in theory, recovered the ball with two seconds left. Pete Carroll did the right thing and and had his QB throw a 48 yard pass to Damien WIlliams for a TD. The Trojans ended up winning by an extra touchdown. Neuheisel should not have called the time out when it was clear that all he was doing was delaying the game. Bill Plascke called it right when he said coach Rick should have gotten one instead of taking one.

Friday, November 27, 2009

Dickensean Devotee

I am a devotee of Charles Dickens. I especially like A Christmas Carol - which is the novella that Dickens wrote about the time he visited the US. I've got the story in print and most of the video versions of it. My personal favorite is Alistair Sim - which was produced by Jack Warner and seems to have started from the premise that a movie should mostly accurately reflect the original underlying work.

The other versions that I know about include = A Christmas Carol (1938) starring Reginald Owen, Gene Lockhart, Kathleen Lockhart, June Lockhart, Leo G. Carroll, and Terry Kilburn. 69 min.; A Christmas Carol (1951) starring Alastair Sim, Meryvn Johns, Michael Hordern and Glyn Dearman 86 min. ;Scrooge (1970) starring Albert Finney, Sir Alec Guinness, Edith Evans and Kenneth More. 115 min.; A Christmas Carol (1984) starring George C. Scott, David Warner, Susannah York, Frank Finlay, Edward Woodward and Nigel Davenport. 100 min.; Scrooged (1988) starring Bill Murray, John Forsythe, Karen Allen, Carol Kane, and Bobcat Goldthwait. 111 min.;A Christmas Carol (1999) starring Patrick Stewart, Nick Adams, Desmond Barrit, Charlotte Brittain, Tom Brown, Kenny Doughty, Laura Fraser, Richard E. Grant, Joel Grey, Roger Hammond, Celia Imrie, Ian McNeice, John Mills, and Saskia Reeves. 93 min. Sim still sets the style standard for most of the performances - the nuances in his characterization can be seen in most of the other versions, except perhaps the Bill Murray one which is unique.

I mention this because I went to see the 3D version of the story released by Disney this season yesterday. This one stars Jim Carey in a motion capture version. I saw the non-3D version when the movie first came out. The 3D version is a real addition, an enhanced experience. There were some changes in this script - including a chase sequence in the third part of the story (the ghost of Christmas future) which was added to show off the technology. I think the writers kept mostly to the substance of the story. The technology used to make the movie is very good.

I am interested in the economics of the movie business because my son in law is a finance guy for Disney. As of last week the movie had done about $80 million but I think the studio thought it might get a second wind from the holiday traffic. The estimated total as of yesterday added another $10 million (to $90 total). In yesterday's 4:30 showing the crowd was small. Evidently the technology to make this kind of movie successful is pretty expensive (the estimated cost of making the movie was about $200 million).

For me Christmas would not be Christmas without a dose of Dickens. It will be interesting to see if the movie picks up in the next couple of weeks. I think this version is a good one and well worth seeing.

Thursday, November 26, 2009

Traveling Gyms - comparing bargains

We are in the LA area for a couple of days and in recent years one of the requirements of any hotel stay is a gym where I can work out. This time we stayed at a Comfort Inn in Eagle Rock which was about half the price of the Hilton in Pasadena but it had one defect - the gym is off site. It turns out that the gym is a 24 Hour Fitness facility in Pasadena.

I went there yesterday. When I am on the road, even with family, I try to get in about an hour (at least) on aerobic activity. The 24 hour facility in Pasadena is pretty good - although there are a lot of defects. First, the equipment was not as clean as my home gym. Second, I did not know that amenities that I expect from my home gym (towels and soap for example) are not free. Third, although they offer rental lockers - none of them worked. (One did but it was full and I did not want to put someone else's stuff in another place). The locker room is OK (in a basement) but a bit below my usual standards. Fourth, although there was a parking validation - it still cost me five bucks. So the free ended up costing me $8 for a lock, $3.25 for a towel and $5 for validated parking. (So net $16.25)

Today I went to a place where my mother in law goes. It is called Break Thru Fitness and it is on Del Mar and Lake. Parking is free, ditto for towels and soap. The guest fee is $20 - but free parking and all the other amenities included. So the net is $3.75 more. But the place is spic and span clean. The locker room is nicely done.

In the end while the net cost of Break Thru is modestly more expensive for a visitor, the total experience was much better. I found both places had pretty nice people behind the counter. Obviously, I would not need a lock every day nor would I need to buy a towel each day. So if you look at the two day cost 24 hour is much cheaper. But as noted above the experience at Break Thru is so much better.

In the scope of things - this is not the most important comparison I have ever worked out but as my mother in law used to say to her daughters - sometimes a free dinner can be too expensive.

Monday, November 23, 2009

Eternal Truth

A friend sent me this with the note -" it is impossible to overstate the importance of data." That reminded me of an incident when I was at the University of the Pacific. When I was an undergraduate one of my two leading professors was a leader in the American Political Science Association for the Western States. The APSA was going through a schism between the quants and the non-quants. Some in the field of political science argued that political science would only be a science when everything was proven by data. My professor thought that data could not substitute for thought. We went to the WPSA (the western meeting of the APSA that year) and a graduate student from Berkeley presented a paper where he suggested with a high degree of confidence (the statistical kind not the one involving thinking) that based on his study of the voting behavior of members of congress that in the period between 1955 and 1960 (about six or eight years before the meeting) that congressmen from rural southern districts were more likely than congressmen from northern urban districts to be supportive of increases in agricultural subsidies and military expenditures and less likely to be supportive of issues involving civil rights.

The poor guy left his paper, which he had been reading from on the podium. My professor came up to the podium after the presentation and picked the paper up like it was toxic waste with the comment "That was a very interesting diversion, but now let's get back to some thinking about political science." Half the room was ready to lynch my professor and half thought that the graduate student who had presented was stating what any observer would have concluded with a little bit of careful thought.

Art Savage

Art Savage, who brought the Rivercats to Sacramento, died over the weekend. I met him a couple of times at Rivercats luncheons. From those encounters he had several great qualities. First, he seemed to enjoy baseball - the experience at Raley Field seems to have been designed by someone who appreciates baseball. Raley Field is a fans field. Second, there seemed to be a lot of room around him for accomplishment. Sacramento, in the first ten seasons, had some remarkable accomplishments. We've won the PCL and the Brickyard Showdown twice, and eight divisional titles. But in each of those years Mr. Savage was visible but not at all like many team owners who seem to think that in addition to owning a business they are somehow part of the team. Third, he had a sense of the community. Independence Field - which was his dream to create a baseball venue for disabled players - came about because he encouraged all of the fans (with a substantial boost from his own resources) to create the dream. The Rivercats foundation makes real contributions to the community. Perhaps the best fund-raiser for a local charity was one a couple of years ago where they announced in the first inning that until the ballpark raised X amount of dollars that they would continue to play Kenny G between the innings. That was funny but also successful. Finally, Savage accomplished a feat without the public subsidy that some team owners (like the Kings owners - the Maloofs) claim they cannot live without. The owners of these businesses want to require taxpayers to pay for their stadiums under the false logic of a mix of civic pride and jobs creation. Savage built Raley Field and improved civic pride of West Sacramento, and indeed the region, without needing the subsidy. His model should be instructive to others who think they cannot run a private business without socializing some of the costs.

The Twelve Days of Christmas Taxes (Tim Burton In Washington)

The Heritage Foundation has produced a web memo which details the tax proposals currently on the table. Never mind that with just the House proposal that our marginal rates in this country would rise above France, Italy and Spain when state and local taxes are taken into account. I know it is well past Halloween but this list should scare you.

An income surtax on taxpayers earning more than $500,000 a year,[1]
An excise tax on high-cost "Cadillac" health insurance plans that cost more than $8,500 a year for individuals or $21,000 for families,[2]
An excise tax on medical devices such as wheelchairs, breast pumps, and syringes used by diabetics for insulin injections,[3]
A cap on the exclusion of employer-provided health insurance without offsetting tax cuts,[4]
A limit on itemized deductions for taxpayers with a top income tax rate greater than 28 percent,[5]
A windfall profits tax on health insurance companies,[6]
A value-added tax, which would tax the value added to a product at each stage of production,[7]
An increase in the Medicare portion of the payroll tax to 3.4 percent for incomes great than $200,000 a year ($250,000 for married filers),[8]
An excise tax on sugar-sweetened beverages including non-diet soda and sports drinks,[9]
Higher taxes on alcoholic beverages including beer, wine, and spirits,[10]
A tax on individuals without acceptable health care coverage of up to 2.5 percent of their adjusted gross income,[11]
A limit on contributions to health savings accounts,[12]
An 8 percent tax on all wages paid by employers that do not provide their employees health insurance that satisfies the requirements defined by the Secretary of Health and Human Services,[13]
A limit on contributions to flexible spending arrangements,[14]
Elimination of the deduction for expenses associated with Medicare Part D subsidies,[15]
An increase in taxes on international businesses,[16]
Elimination of the tax credits paper companies take for biofuels they create in their production process--the so-called "Black Liquor credit,"[17]
Fees on insured and self-insured health plans,[18]
A limit or repeal of the itemized deduction for medical expenses,[19]
A limit on the Qualified Medical Expense definition,[20]
An increase in the payroll taxes on students,[21]
An extension of the Medicare payroll tax to all state and local government employees,[22]
An increase in taxes on hospitals,[23]
An increase in the estate tax,[24]
Increased efforts to close the mythical "tax gap,"[25]
A 5 percent tax on cosmetic surgery and similar procedures such as Botox treatments, tummy tucks, and face lifts,[26]
A tax on drug companies,[27]
An increase in the corporate tax on providers of health insurance,[28] and
A $500,000 deduction limitation for the compensation paid by health insurance companies to their officers, employees, and directors.[29]

Sunday, November 22, 2009

Two Reviews for the Price of One

Yesterday, while my wife was in Babys R Us, I went to the AT&T store to replace my bluetooth headset. I had been using a Jawbone 2. It was supposed to be the best bluetooth on the market. But I had never had very satisfactory service out of it. It is very hard to turn on and not easy to figure out whether your headset is on. No I am not one of those dorks that keeps the damn thing in my ear all the time but when I am traveling I use a bluetooth headset when I am driving and also when I am tired at the end of the day.

A friend who I work with had just bought a Plantronics Voyager so I wanted to look at the alternative. I went into the AT&T store and was "checked in" by a guy. I asked him about a Plantronics bluetooth and he pointed me to all the models. But no sales clerk seemed interested in taking my dough. There was a Plantronics headset on the counter and I said I would like to buy one and the guy at the cash register asked me where I was in the queue. At that I walked out. I then thought of the Best Buy which is close to the AT&T store.

I parked and then went to the phone section. In about 30 seconds I found a clerk and said I was interested in a Plantronics bluetooth. He asked why. I said I had a Jawbone and did not like it. He said Plantronics had similar noise canceling features. He then showed me two types - one over the ear and the other in your ear. I decided on the in the ear model because it has a traveling charger (Great IDEA!!!). The clerk asked me if he could pair it with my phone. He then did that. I was out of the store in about 4 minutes flat.

I am not likely to go back to the AT&T store again. The clerk at Best Buy knew his stuff and was helpful.

Blind Side

Blind Side is a movie about a series of contradictions. A wife from a rich family in Tennessee finds a kid who is essentially homeless and takes him in and regardless of any criticism she receives she keeps thinking about how to make the kid's life better off. Sounds kind of syrupy doesn't it? Well the story is true. I had read about the woman and the kid - who it turns out is also a football player. Most of these "true story" films are silly but this one is well worth watching. Sandra Bullock (who plays the mom) and Quinton Aaron (who plays the kid) and the rest of the cast are superb - they are first and foremost believable. The movie is inspiring. I really enjoyed it.

Friday, November 20, 2009

Satchel Paige to Steve Ballmer

According to TechFlash, shareholders questioned Balmer about Microsoft's slipping reputation among college students and Apple's apparent gains among the same segment of consumers. "I'm just wondering why your marketing group can't do something to try to rein in this next generation, because you've got a real bad image out there," one shareholder reportedly said.

Balmer responded that "opportunities for improvement" did exist and acknowledged that there "is a group of people with whom our market share is less." He ultimately played down Apple's growing market share, reportedly adding, "it is important to remember that 96 times out of 100 worldwide, people choose a PC with Windows, that's a good thing."

But like most of Ballmer's statements they should have been checked for accuracy. Two things should be noted. Between Apple and Linux - the current market share is about 6% but when you look at satisfaction Windows in all its various lives is not loved by many. Mac and to a lesser extent Linux draw fierce partisans. And they are both growing. Several major makers of PCs have decided that they should offer options in operating systems for their models. Does that mean MSFT products are no longer useful? Of course not. But does it mean that the dominant market share is secure? Were I Ballmer I would be worried. Their attempts to catch up in a number of areas (You might call the Zune the MSFT music player the Area 51 of Music Players) has had limited success. The other trend which should concern them is whether operating systems are becoming commoditized. Is the value of the franchise - even at 93% as valuable as it once was with more and more net based applications - probably not. I use Microsoft products every day. But I use less of Powerpoint and less of Word and none of the operating system than I did a decade ago. That may be what the shareholders are really worried about - but then as he is called on the net "monkey boy" does not seem to get that transition. He spends a lot of time looking over his shoulder and as Satchel Paige said ""Don't look back. Something might be gaining on you."

Health Insurance Bribes (Reid's Louisiana Purchase)

Mary Landrieu is a senator from Louisiana and has been suggesting she will not vote for the health care bill. Here is a provision that ABC News says is going to secure her vote. The provision was added by Senator Harry Reid. The language only applies to the state of Louisiana.


Section 1905 of the Social Security Act (42 U.S.C. 1396d), as amended by sections 2001(a)(3) and
2001(b)(2), is amended— (1) in subsection (b), in the first sentence, by striking ‘‘subsection (y)’’ and inserting ‘‘subsections (y) and (aa)’’; and (2) by adding at the end the following new subsection:

‘‘(aa)(1) Notwithstanding subsection (b), beginning January 1, 2011, the Federal medical assistance percentage for a fiscal year for a disaster-recovery FMAP adjustment State shall be equal to the following:
‘(A) In the case of the first fiscal year (or part of a fiscal year) for which this subsection applies to the State, the Federal medical assistance percentage determined for the fiscal year without regard to this subsection and subsection (y), increased by 50 percent of the number of percentage points by which the Federal medical assistance percentage determined for the State for the fiscal year without regard to this subsection and subsection (y), is less than the Federal medical assistance percentage determined for the State for the preceding fiscal year after the application of only subsection (a) of section 5001 of Public Law 111–5 (if applicable to the preceding fiscal year) and without regard to this subsection, subsection (y), and subsections (b) and (c) of section 5001 of Public Law 111–5.

‘‘(B) In the case of the second or any succeeding fiscal year for which this subsection applies to the State, the Federal medical assistance percentage determined for the preceding fiscal year under this subsection for the State, increased by 25 percent of the number of percentage points by which the Federal medical assistance percentage determined for the State for the fiscal year without regard to this subsection and subsection (y), is less than the Federal medical assistance percentage determined for the State for the preceding fiscal year under this subsection.

‘‘(2) In this subsection, the term ‘disaster-recovery FMAP adjustment State’ means a State that is one of
the 50 States or the District of Columbia, for which, at any time during the preceding 7 fiscal years, the President has declared a major disaster under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act and determined as a result of such disaster that every county or parish in the State warrant individual and public assistance or public assistance from the Federal Government under such Act and for which— ‘‘(A) in the case of the first fiscal year (or part of a fiscal year) for which this subsection applies to the State, the Federal medical assistance percentage determined for the State for the fiscal year without regard to this subsection and subsection (y), is less than the Federal medical assistance percentage determined for the State for the preceding fiscal year after the application of only subsection (a) of section 5001 of Public Law 111–5 (if applicable to the preceding fiscal year) and without regard to this subsection, subsection (y), and subsections (b) and (c) of section 5001 of Public Law 111–5, by at least 3 percentage points; and ‘‘(B) in the case of the second or any succeeding fiscal year for which this subsection applies to the State, the Federal medical assistance percentage determined for the State for the fiscal year without regard to this subsection and subsection (y), is less than the Federal medical assistance percentage determined for the State for the preceding fiscal year under this subsection by at least 3 percentage points.

‘‘(3) The Federal medical assistance percentage determined for a disaster-recovery FMAP adjustment State under paragraph (1) shall apply for purposes of this title (other than with respect to disproportionate share hospital payments described in section 1923 and payments under this title that are based on the enhanced FMAP described in 2105(b)) and shall not apply with respect to payments under title IV (other than under part E of title IV) or payments under title XXI.’’.

The cost of this bribe is $100 million - but who cares it is not Harry Reid's money - it's yours. The WP suggests that the net cost of the health care bill will actually reduce the deficit - based on the combination of program cuts and tax increases less the $800 million+ in new spending. Don't believe it. This may buy her vote but it may not buy Senator Landrieu's re-election.

Ecumenical Glasses

Rowan WIlliams the Archbishop of the Anglican Communion is in Rome and was quoted in the NYT as saying “The ecumenical glass is genuinely half full.” One could argue that the Pope's recent invitation to dissident Anglicans came in part because the Rev. Williams and the leadership of the American Anglicans have been busy draining the glass as fast as they can.

The Episcopal tradition includes something called discernment - that allows change but is inclusive of a variety of points of view. But the denomination has been less willing to think in this truly ecumenical way for quite a long time. A good deal of doctrine has been made up by majority rule and a good portion of Anglicans are chafing under that new regime.

The Anglicans, after a long discussion, decided that it was appropriate to ordain women to the priesthood. For most American Anglicans that was a reasonable decision. But then the leaders of the denomination moved toward the ordination of homosexuals and sanctioning gay marriage. I suspect that had the American communion had some patience with their fellow parishioners who were opposed that they could have thought the issues out through the process of discernment. But the majority wanted to push the issue through.

Now the denomination is trying to repair the breech by demanding that all churches affirm that the ECUSA (national church) owns their facilities. The same thing is happening in other protestant denominations. Ultimately, that will not be good for congregation building.

Tuesday, November 17, 2009

From the Social Security Trustees Report – with no editorial comment but one….

Social Security could be brought into actuarial balance over the next 75 years with changes equivalent to an immediate 16 percent increase in the payroll tax (from a rate of 12.4 percent to 14.4 percent) or an immediate reduction in benefits of 13 percent or some combination of the two. Ensuring that the system remains solvent on a sustainable basis beyond the next 75 years would require larger changes because increasing longevity will result in people receiving benefits for ever longer periods of retirement.

The Medicare Report shows that the HI Trust Fund could be brought into actuarial balance over the next 75 years by changes equivalent to an immediate 134 percent increase in the payroll tax (from a rate of 2.9 percent to 6.78 percent), or an immediate 53 percent reduction in program outlays, or some combination of the two. Larger changes would be required to make the program solvent beyond the 75-year horizon.

Editorial Comment – Is it really time to authorize a new trillion dollar entitlement in a period where the trustees of the Social Security System tell us that they will again have to either significantly increase taxes or decrease benefits or both to keep the two current systems solvent?

Sunday, November 15, 2009

The New California Motto - Amitto

I am a native Californian. My state has always been a place where risk taking and discovery are an essential part of our psyche. But I look at the superlatives of the state and believe that Eureka no longer fits the state. Instead of Eureka, we should change it to Amitto - I've lost it.

Witness the following:

#1 - California has a number of superlatives about it now - the worst credit rating among the states; the fourth highest unemployment rate in the country; at the beginning of the year the third highest level of deficit (as a percentage of total spending) and a continuing inability to balance our budget; the second highest foreclosure rate and the highest rates for sales and income taxes in the country.
#2 - Even though our ports contribute significantly to our economic prosperity and our position in global markets, the state's leadership seems to treat them as almost toxic assets. Members of the legislature, including most recently Dean Florez, have used the ports as a PR device to show their political sensitivity.
#3 - We've let a three inch, inconsequential fish (the delta smelt) paralyze us into creating a new dust bowl in the central valley of the state. Water shipments to farmers in one of the richest agricultural regions in the world have been curtailed by as much as 90% based on shoddy environmental evidence.
#4 - Our state budget priorities are out of whack - we now spend more on prisons than higher education. We face yet another significant budget deficit. That goes along with a bizarre tax system which is driving high income tax payers out of the state.
#5 - A distinguished panel of Californians studied the tax system and came up with a good report on how to reduce the revenue volatility in the system. The report was not perfect but it was a great start. But it seems to be dead on arrival - no intention to move the discussion forward. The business community, which pays heavily under the current system, dismissed the ideas without any serious consideration.
#6 - We've furloughed state employees to save money making state services less available and making the job of public service even less desirable. At the same time we have allowed a couple of public employee unions and sometimes the trial lawyers to have an absolute veto on key items in the legislature.

The list could go on - but that gives you an idea of why the motto change is appropriate. My other question would be when can we recover, as a 1970s writer once called it "The Last Days of the Late Great State?" As a native Californian I wish I could say.

Saturday, November 14, 2009

Yo la tengo - Funny

A techie friend sent me the link to this video which I thought was very well done - and funny.

Friday, November 13, 2009

The Reality Sinks in....

Recent polling by Gallup suggests that a majority of Americans now think healthcare is NOT a federal responsibility. As the details of the Pelosi and Reid plans leak out, that is not surprising.

Thursday, November 12, 2009

Therapeutic Terrorism

The stories about accused mass murdered Nidal Malik Hasan vary. He seems to have studied under a radical muslim cleric when he was at Walter Reed. There are other indicators that Major Hasan was trying to carry out a radical act. According to some press reports he gave away his belongings before entering the readiness center at Ft. Hood. He seems to have dressed in the traditional white. He seems to have bought the two handguns he used outside of the base. But in an effort to almost overbalance the coverage here against his growing faith in Islam - we seem to be wanting to construct a psychological profile of this guy. Anyone who commits an act like the one Hasan did has some screws loose. But without a detailed evaluation all of the "expert" commentary about who Major Hasan was at the time of the shootings is nonsense.

I would prefer for the news to be just that - here is what happened. GIve the the details that you know. But we consistently prattle on about this or that psychological theory. How about Joe Friday news? - nothing but the facts. His inevitable trial will allow the exposition of all the other stuff. For now we should be concentrating on the losses for the families at Ft. Hood (first) and trying to discover(second), if indeed this was an act of domestic terrorism, how to prevent a future one.

Wednesday, November 11, 2009

Pew (both center and condition)

"Decisions these states make as they try to navigate the recession will play a role in how quickly the entire nation recovers." So says Susan Urahn of the Pew Center. The Pew Center issued a report on the finances of all 50 state but concentrated on nine including Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin. They including California are about a third of the total US population

California's problems come from a variety of problems including poor money management and the economic downturn and foreclosures. But according to Pew they are not solved. California's foreclosure rate is lower than Florida, Arizona and Arizona. Our revenue drop is more than the US but less than Oregon, Michigan and New Jersey. Gee that really gives me comfort.

Monday, November 09, 2009

The Economics of Health Care Bureaucracy

In the American Economic Review in 1968 William Niskanen (the former leader of the Cato Institute) wrote an article on the peculiar economics of bureaucracies. Niskanen argued that bureaucrats work to maximize their budgets while entrepreneurs work to maximize outputs. When downturns occur, because the bureaucrats don't care as much about their service provision, the first thing they reduce is service. Entrepreneurs, because they directly benefit from the growth of the firm, reduce services last. A firm that is run by managers would be expected, because of the less direct benefit to managers for better growth, are expected to act more like bureaucracies.

A demonstration of that came last fall when the public segments of higher education in California lost the first of two pretty substantial portions of their budget. Both immediately announced a significant reduction in the number of spaces offered to students. The independent colleges and universities, although they had suffered economic challenges, did everything to maintain enrollments.

As I have thought about the health care debates, I have wondered which model would apply to the House bill or other alternatives. A good portion of the health care industry is run out of either government or large bureaucracies. While Niskanen argued that there were slight differences between bureaucracies and manager led firms,both reduce their commitment to protecting the level of service over entrepreneurial firms. It is pretty clear however that applying Niskanen's theory to the public option suggests that services would be reduced first over other alternatives for saving money - more cost, less service; not exactly a good combination.

Tax dollars at work

The Connecticut legislature has spent most of the year trying to work the state out of a deficit. The members of the legislature engage in serious debate and discussion. See the attached picture.

The Men Who Stare at Goats

The Men Who Stare at Goats is a quirky movie. It is about an alleged special unit in the Army designed to use psychic powers. A reporter for the Ann Arbor paper interviews a local person who puts him on to a story of the unit. His marriage breaks up and so he decides to pursue the story. He travels to Iraq and meets a couple of the key players who had been in the unit. One of them takes him on a trip through the desert. Sound a bit odd?

Well, yes, it should. But like a lot of other movies that George Clooney has been in recently, it is very funny. Not slapstick, although there is some, but funny as in tightly woven line of humor. I really enjoyed the movie.

Sunday, November 08, 2009

So what happens next

The earlier post on the health bill vote did not speculate on what happens next. As I see it there are three possibilities.

#1 - A bill close to the President's vision gets adopted. The president invested a lot of his political capital yesterday in the bill and got it passed but with two significant caveats. First, 39 members of his party deserted him - that is not a small number. Second to the the bill the majority got some back by adding the abortion amendments in (which will be dropped if there is a conference committee). But the possibility that the House bill will become the final one are very close to zero. What is unclear is whether the Reid Opt Out option is a viable alternative. I think it is not. But we have not seen the final Senate bill yet to understand whether the majority in the senate can surmount the blockage up to 60 votes. If this scenario were to be real - I suspect it will take some time to get to an agreement. So don't expect a bill until after the start of 2010.

#2 - The initiative by the President is stopped in the Senate. At this point there are five or six democrats who are unlikely to vote for a bill with a high price tag and a public option. I am reasonably convinced that the opt out option is not enough to bring them back. So far the leadership of the Senate, including Senator Baucus have been unwilling to seek legitimate GOP support. Even the vote of Senator Snowe is unlikely to stay if a public option is present. If the president's numbers continue to deteriorate and the direction of the country polling continues to go against the administration the number of nervous democrats could increase. In spite of the brave denunciations by the President's mouthpiece, Tuesday's elections did include a vote on the president and he lost big time - he invested a lot in NJ and VA and lost both races.

#3 - The Sausage Alternative - I suspect the President may get a bit more pragmatic if the Senate process begins to bog down. He may compromise for any bill which appears to move things forward. If the democrats are smart (and so far they have not shown a lot of creativity on this issue) they will try to bring in some GOP members (more than the one member from Louisiana who voted for the bill yesterday). Originally the Administration has concentrated on strategy and not policy. They want the whole loaf. And if things begin to bog down they will have to make a choice - do they think ideological purity will yield more to them in 2010 and beyond? If they move more to figuring out what will be perceived as forward movement, they could coax some GOP members to think with them.

I am not sure which of the three alternatives is the most likely, we will have to watch developments over the next couple of weeks to see what develops. So far the House leadership and the Administration have assumed that hardball is the best strategy (and possibly the best policy). That opinion could change very quickly.

The Health Care Vote

There are only two things I can say about the health care bill vote in the house yesterday. First, the partisan split is interesting. 39 democrats voted against it while only one member of the GOP voted for the bill. The narrow split (220-215) suggests that the $1.1 trillion cost and the public option are in deep trouble in the Senate. But second, as you count the vote in the Senate the waivering democrats will be given little comfort. That suggests to me that either the senate bill will be significantly modified or it may forestall passage of a final bill.

It is clear that the President is deeply committed to the approach in the House bill. It is also clear that the American people are deeply suspect of that approach. Some democratic leaders were proclaiming that this is akin to Medicare and Social Security - and with the current financial state of both those programs that may not be a positive connection.

Wednesday, November 04, 2009

Tone deaf

The NYT has a story about the democrats response to the losses in the VA and NJ governor's races. The Times story says
"party strategists said their judgment was that voters remained very uneasy about the economy and did not see Democrats producing on the health, energy and national security changes they promised when voters swept them to power only a year ago." I am not sure that is what the voters were actually saying yesterday.

The exit polls are pretty clear. Those who were concerned about the direction of the country voted against the democratic candidates. President Obama campaigned vigorously in both New Jersey and Virginia and voters voted against the candidates he endorsed. Representative Frank Kratovil Jr.said “We have to do something, but it has to be right.” Well, duh.

One member of congress that I worked for said politicians only have to do three things. First, they have to be for everything that is good. Second, they have to be against everything that is bad. But third, and this is the hard one, they have to understand the difference between the first and the second requirements. Evidently the dems haven't mastered that skill yet.

Tuesday, November 03, 2009

The Elections in NJ and Virginia had nothing to do with the President's Standing and other myths

Yeah, right. If you believe that you must also believe that Tinkerbell is real. In both Governor's races the President put his prestige on the line. He and his representatives were in both states a lot. In New Jersey the President visited into strongholds of democratic support in two areas on November 1. He and the first lady also made a series of visits to Virginia. Most news sources before the election argued that the President had made a substantial personal commitment in both races. The NYT described the victory by McDonnell as "decisive" and as a "sharp reversal" from the previous eight years. They also quoted exit polls which showed a significant shift among independent voters who went strongly for Obama in 2008 and strongly against Corzine and Deeds in 2009. The LA Times was so disoriented that its headline was the two democrat congressional victories. Down about a dozen paragraphs into the story, the Virginia governor's race is covered.

The new governor in Virginia won by an impressive 18 points. Chris Christi won by six, in a state where organizationally the dems are far in the lead. The exit polls seem to indicate that between 85 and 90% of the voters who think the direction of the country is wrong voted to McDonnell or Christi. The combined GOP vote (the GOP and CON lines) totaled 51% in the NY 23rd. If I were Bill Owens I would not rest easy.

Does this mean the President is losing his base? Yes and No. On this election night, were I a democrat elected to a traditionally GOP house seat, I would be worried. But if I were a GOP member of congress I would not begin to pick out majority offices just yet. It is clear the people are grumpy. The WP said McDonnell won his race by by "focusing almost exclusively on jobs, transportation and other kitchen table issues." That should be a strong message that all the extra stuff that the GOP added to the campaign tools were not helpful in electing people. But the polling also seems to have said that the president's health care plan is also a loser. It turned voters off. It is clear that the President has lost some of his luster. But it is not clear that the GOP has a coherent answer. Deeds was a lackluster candidate. Corzine was both corrupt and a tax raiser of immense proportions. So the claim that the elections were influenced by local factors is also correct. But CNN's Wolf Blitzer outlandish claim that the results did not reflect on the position of the president is just silly.

Thanks for Nothing

The Internal Revenue Service offers advice to help taxpayers complete their returns. But the quality of their advice is a bit less than perfect. In the most recent year the error rate was 41%. Gee, if I ask the IRS for help I have an almost 50% chance of not getting good advice. Even in their best year, almost a third of their advice is inaccurate.

The explanation of that very high rate is pretty simple. It is not that the IRS people need more training. It is simply that the tax code itself is riddled with complexities that almost no one, even an IRS employee trained to explain it, can understand it.

Sunday, November 01, 2009

Rethinking the Fall of the Wall

An enduring image of twenty years ago was the fall of the Berlin Wall which separated East Germany from the West. Time's November 9 issue includes an article that President Reagan's role in bringing down the wall (and the fall of communism) remains "exaggerated, manipulated and misunderstood." The article was adapted from a recent book by Romesh Ratnesar. Ratesnar argues that the eventual change came about from a number of factors. That is obviously true. And indeed, President Reagan mixed diplomacy with tough talk. But part of the reason that Reagan was able to be successful diplomatically was because he could back up his diplomacy with substance.

Ratesnar makes the point that the wall "fell of its own weight." That is utter nonsense. The soviet economic system was driven to ruin because of at least three factors. First, was the fraud that was the system. All the five year plans were piffle dust. But second, technology began to allow people to communicate even with the restrictions that the soviets tried to impose. That also led to increased trade which was facilitated by the Reagan administration's strong stance on opening trade. But finally, the race for defense that Reagan got the soviets to participate in helped to destabilize the system.

Obviously, the aging of the dictators that ran the system and their increasing incompetence helped move the process along. But to deny the central role that President Reagan had in helping to end the oppressive system of soviet communism is revisionism without basis.

Ratesnar's conclusions are sounder than his analysis. He argues that even if the President wants to make peace with the Mullahs "there is no guarantee that he will succeed." He goes on to suggest that "Reagan's gift was his ability to speak candidly about the realities of his age while still presenting and working toward an optimistic vision of the future." You might summarize by saying that for the most part Reagan followed Teddy Roosevelt - he spoke softly and carried a big stick.